NY Times notices that FATCA is “vexing” and “major headache”

Many previous posts in this space have addressed the Foreign Account Tax Compliance Act, which presumes to regulate overseas banks and financial institutions that do business with Americans, and which goes into effect next June. So it’s nice to see the Paper of Record running a reasonably informative introductory piece on its problems, even if at too late a date to get the thing stopped. “Global banks and investment firms have made their dislike of the law known, though they are reluctant to speak out individually” — and how common that last point is these days, given the retaliatory potential of the U.S. government’s vast regulatory and enforcement apparatus for a business that does dare to speak out. Still, a few critics are willing to show their heads above ground, including

Georges Ugeux, a dual Belgian-American citizen, a lecturer at Columbia Law School and the founder of Galileo Global Advisors, an international business consulting firm. He described the law as “bullying and selfish.” The United States, he said, “is acting outside its borders as if they were its home.”

It is a very “european-style” law, because it is all about wealth, and tracking it as it moves to avoid taxation. The French have similar laws because they don’t want people to park their money in places where the govt can’t see it and tax it. The Greeks haven’t figured out how to do it, or maybe thousands of years of experience with government has taught their people how to avoid it, which is why so much of their wealth is parked outside Greece, and the Greek tax system works so poorly.

In any case, all of these laws are a pain for ex-pats (of any nationality), because of the paperwork and the reluctance of local banks to take on non-local customers. In the case of the US, the forms are also incomprehensible, probably because they were written by lawyers who wrote in the language of the statute, without bothering to explain their terms.

This law has created a lot of problem for American or PR who want to invest and partner with foreign companies. The additional paper works and tax regulations just made everyone think twice about any investments. In the short term, the only people happy are tax lawyers/accountants and software companies. In the long term, this law will cut off American from many new deals and projects in Asia and Europe. This law should be changed if we want America to be strong and robust. This law makes American like a bean counter and a big brother spying on its own citizens